STATE OF KARNATAKA vs B. RAGHURAMA SHETTY ETC.

The Supreme Court held that under Section 6(i) of the Karnataka Sales Tax Act, 1957, paddy and rice are distinct commodities, and the milling of paddy constitutes a manufacturing process. The Court clarified that the levy of purchase tax on paddy is permissible as there is no double taxation on the same commodity. The Court affirmed that consumption in an economic sense includes the use of raw materials in production processes, thus allowing the appeals and upholding the tax liability on the purchase turnover of paddy.